at whole foods while you go shopping that's the latest thing i've heard. >> could cut costs by a lot. >> okay. we'll see. >> i don't want to pick up anything i want it delivered. >> me, too. >> you better buy the asphalt companies because they will have to double the size of the parking lots. >> good stuff, brian thanks for watching "power lunch." >> "closing bell" starts right now. welcome to the "closing bell." i'm sara eisen leer for kelly evans at the new york stock exchange. >> welcome aboard. >> thanks, bill. >> i'm bill griffith energy has been the worst performing sector. today the oil market has entered bear market territory. down more than 20% as its definition what's behind that move coming up in a moment here. >> snap shares getting hit after strong numbers for instagram's story feature were released. we've got early snap investor and star of apple's new apple

series "planet of the apps" to talk about this move lower today for snap and in general back down to the ipo price. >> a lot to talk about with jeremy liew. >> and bitcoin investments. >> he's hot on bitcoin right now. a lot of that coming up in a bit. plus, alibaba is hold be an avent to attract u.s. entrepreneurs. the vice chair of the company joe tsa i will join us for an exclusive interview with david faber to talk about that strategy the latest now out of washington and there's been plenty of house speaker ryan, are you saw that speaking to cnbc last hour about tax reform here's what he told brian sullivan when he asked him if he would support a push for a 15% corporate tax rate. >> i would love it if we could get the numbers to make it work. >> do you think you can? >> i'm all for it, something that's actually possible we're going to spend all summer long drafting and getting what we call scores, getting the numbers to work. we being the house tax writers, the senate tax writers and the white house and treasury department, getting these numbers to work, so we want to

get these rates as low as we possibly can, get to a territorial systems. the basics that we all agree on and that's what we're working off of right now so we can stick the landing this nal because we really do believe you can't get to 3% growth without this. >> aggressive timeline tax reform is front and center for many investors, health care still needs to get done first. our kayla tausche is in washington with the latest on that moving target kayla, what can you tell us? >> sara, it's six weeks after the house passed its version of the health care bill and well into an opaque process being run by the senate, but just a few moments ago senate majority leader mitch mcconnell provided some details about how that process is going >> we're going to lay out a discussion draft thursday morning. you'll be able to take a look at it i think you've heard from some of my colleagues the likely highlights of it, and i wouldn't want to compare it to the house bill it will speak for itself.

>> that was in response to a question about whether the bill would reflect more heart as the president has requested from the senate version of this now, the senate majority leader stopped just short of saying that it was guaranteed to pass, and to that end senator bob corker told cnbc it's impossible to know how many votes they have in support of this without it actually being out there and senator ted cruz telling me in the hallways here that he believes that there's still quite a bit of work to do even after this discussion draft is put forth. minority leader chuck schumer also saying he believes when this draft is released it's going to meet the same fate of the house bill the first time it was unveiled in march to widespread criticism about how many millions of americans would be losing coverage under that plan to be sure, there are fractures still in the senate, mcconnell earlier on the floor tried to give voice to every single one of the priorities they are trying to balance here, anything from lowering peopleures, removing coverage mandates,

stabilizing the insurance market, protecting pre-existing conditions and also strengthening medicaid interesting language from mcconnell on that point because that's a very key issue for senators from states like ohio and arkansas that have expanded medicaid there are reports that the senate plan cuts deep near medicaid, but it lets the expansion go on five years longer before ending it, but we'll see, bill and sara, what's actually in that draft on thursday. >> yeah. i mean, part of the discussion about medicaid expansion is this opioid addiction problem that we face in many states around the country, and medicaid has been a big tool used to try and fight that, and if you cut that back, that's problem -- that's been a big problem in ohio, for example, right >> exactly, and senator rob portman from ohio has been one of the leading voices in this senate working group on medicaid expansion, on that very issue, bill the expansion of medicaid in ohio alone has brought millions

more americans under the umbrella of coverage there, and it's really politically fraught to say not only are you not going to get coverage, but you potentially have an issue that could be life-threatening and is an epidemic, that the administration has prioritized as well. it's unclear when the president means when he says he wants more dollars in the senate bill, more heart, more generosity exactly what he wants to see that manifested as, but we expect that the white house will have a response when we get more details later this week. >> all right we'll see what we get. kayla, thank you for the update, reporting from capitol hill our kayla touchy. chicago federal reserve president charlie evans sat down with our own steve liesman earlier this morning giving his thoughts on how the progress of president trump's agenda is actually impacting business confidence listen >> business confidence has been strong that's certainly true. i think it's been an expectation that washington, the president and congress would deliver on, you know, some type of tax reform, right sizing regulatory burden and less regulatory

burden, things like that it's taking longer, and there's more uncertainty it hasn't really been laid out in a clear fashion, i think, and so, you know, people are probably downgrading how much they expect. >> so what does this all do to the trump trade that we've been talking a lot about? joining our "closing bell" exchange with the dow down 25 points, hank smith from abbottford trust and steve bliss is here at the new york stock exchange with with us and rick santelli is at the cme in chicago. and hank, i'm going to start with you because, you know, we all know about the high expectations that the market participants had after the election and it seemed to have waned, but now we're getting the kind of jawboning out of both the house and the senate that we often get from fed members as they get us ready for something. >> verbal intervention >> yeah, exactly so speaker ryan setting us up for tax reform and mitch mcconnell setting us up for health care reform do you -- but yet the market

just is still sitting here right now. what do you think is going on here, hank, in the market? >> well, i think the market has been driven year-to-date by the earnings growth, the fact that the s&p 500 saw 14% profit growth in the first quarter and for the year we're looking at about 10%, the earnings recession is over now, i think we're set up for a win-win. if we don't get any of these fiscal reforms that the trump administration has promised, we're still in this 2% economy with very little risk of a recession, and the stock market has proven it can do okay. if we do get it, the trump trade is back on, and i think you'll see some of the sectors that did well in the last two months of 2016 pick up again, industrials, basic materials, financials. really, it's a win-win either way for this market in our view. >> and now we want to talk about the trump trade, but what stands out to me in a quiet market today is actually oil prices plunging again

below $43 a barrel, lowest level since mid-november and into a bear market. yes, energy stocks are getting pummeled, but are you impressed at the overall resilience of the broader market where last january that sort of plunge was dragging down the entire market? >> right i am impressed as we're getting a little more broad-based support around the marketplace we've seen the rally over the last couple of months, however, really be focused on the sec textor and while oil is selling off and the energy complex gets hit a little bit, other pieces are picking it up. having said that on the resilience of the market on the short-term basis, there are long-term warning signs that we really need to be cognizant of one of those is we just talked about earnings the earnings have been good in the first quarter, and the second quarter they are okay but they are absolutely diverging, the earnings growth and dividend growth is diverging from the global growth in the market. at some point these toe have to reconcile one another. certainly it has to happen, so i

think we just need to be prepared about that, but in the short term i do agree that the path of least resistance is higher at this point in time you're right about the senate and house joeboning the market and kind of picking up the slack for the white house while they are dealing with russia investigations and talk of impeachment and collusion and all that other nonsense and that's what's really going to driest market. business confidence remains high, as charles evans said if you look at the nifb report that's at multi-year highs and as long as that maintains and we push towards health reform and tax reform over the summer and make that happen, then do i see these markets continuing to trend higher. >> rick, i'm curious what do you think your markets that you follow and talk about, the currency markets and treasury markets, how do you think they will respond assuming that -- that congress does come up with meaningful tax reform and health care reform of some kind >> i think it's going to be like watching a gemini rocket exit a stage and fire up a new stage. i think the equity markets can

garner a 5% to 10% appreciation. i do think i'd -- i'd be fascinated to see how the interest rate complex assimilates such a legislative success because i still say one of the deeper channels affecting our yields here are yields overseas when whether you look the at negative short end of many markets overseas or just the dynamics of positions in central banking purchases. i really think that that's what you need to pay attention to i am in the camp, and i have firmly been in the camp, that investors, you know, i know that hank talked about all these sup sup superfluous issues they see a president who tries to help the agenda whenever he can. they don't imagine that trump will be sitting in rooms writing it specifically by himself, is and i think congress, both houses, have everything under control. now is it messy? of course it is. name a piece of legislation of

this magnitude in the last 100 years that wasn't mess me, so i think the markets have yet to price in some of those positives should they and i believe they will occur over time >> we've heard that over and over again with this market. especially bonds and the dollar completely reversing the trump trade from the election. hank, to you now on some of your picks. you like some of the financials and technology stocks. >> right. >> i'm wondering if that has anything to do with these broader themes of repatriation and deregulation from the trump administration or if you're looking at individual sort of stock stories and earnings drivers. >> well, yeah, with respect to the financials we like the higher quality banks like jpmorgan and wells fargo the valuations are reasonable. better than bond yields with dividend growth. you have a potential of a little bit of reflation if you get the trump trade, but if not the roll-back of dodd/frank should

push n.the risks of push in. with respect to some of the technology holdings, again, better than bond-like yields, a very low valuation and dividend growth, so that's a theme that has played out throughout this entire bull market that you can get dividend income better than fixed income and you get growth of the income which you don't get in fixed income. and here we are into the ninth year of a bull market, and that is still the opportunity today >> right. >> every year people think that bond yields are going to go up. >> got to go up at some point, just not yet thank you, guys. always enjoy talking to you. thanks for joining us today. appreciate if. >> my pleasure all right. up next, we have -- where's the clock? >> right there. >> about 45 minutes to go before the closing bell we're seeing slight declines for the dow. in terms of the s&p 500, health care, utilities have been a bright spot and most of the other sectors are lower. half a percentage point decline there, and had the nasdaq also

selling off half a percent we'll check with snap investor jeremy liew about his new tv project with apple. >> also later. david faber is going to bring us an exclusive interview with alibaba vice chair joe tsa i live from the company's business summit in detroit. we want to hear from you you can contact the show, "closing bell" right on twitter. go to facebook or you can e-mail us there's the different ways you can contact us we always love hearing from you, and sometimes we even show what you say. >> you can come to us individually as well. >> so says sara. >> you don't need the invitation. >> you're watching cnbc, first in business worldwide.

who's the new guy? they call him the whisperer. the whisperer? why do they call him the whisperer? he talks to planes. he talks to planes. watch this. hey watson, what's avionics telling you? maintenance records and performance data suggest replacing capacitor c4. not bad. what's with the coffee maker? sorry. we are not on speaking terms.

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well, actually... you're fired! [ screaming ] lucy and i were invited to not work at the a.v.l. anymore. no! minions! we're going back to villainy. [ cheering ] so, you're villains now? oh no! no. no. no. no. no. [ laughing ] [ evil chuckles ] yow! yes. despicable me 3. rated pg. welcome back shares of graphics chip-maker nvidia slightly higher today on an upgrade to sector weight from underweight. that from pacific crest. the firm says that the demand from the crypto trends currency market has depleted inventory and reduced concerns surrounding gaming segment growth. the stock which we all know has been on fire this year is up another 1% at $159.06. >> on fire, but not as much as

the crypto currency itself. >> that's for shower. >> and our next guest believes that bitcoin, which we're talking about, could hit $500,000 by 2030 it's nearly nearing right now 2,800. did surpass that a week ago. up 184% so far this year our next guest is also collaborating on apple music's very first series, "planet of the apps," a reality show about app developers competing for download dollars, exclusively available on apple music, and he was an early investor in snap. >> so much to talk about. >> we have a lot of topics to get to. >> joining us now is jeremy liew at light speed venture partners. first on your involvement on apple's new tv show, "planet of the apps." why are you doing this we were curious. is this really the best way you can start the next new hot startup. >> are you the next new mr. wonderful? >> i'm the crusher of dreams you know, one of the things that we've found exciting about this show is that it really let's viewers get a view into the

journey that an app developer goes through as they build a new technology company, from the inception to working with mentors, developing the product and then finally raising venture capital, and the last 20 minutes of each show, if you're interested in what it's like to actually be in the room when a company is pitching for money, answering questions, getting interrogated and finally negotiating a deal, well, you get a view into that in "planet of the apps. >> where are we in the app cycle right now? i mean, is that -- is that still the place to reach consumers these days with new technology >> so planet of the apps covers not just apps but also companies that are building on top of messaging, on ton of vr and ar and so it's quite an all-encompassing set of platforms. >> yeah. let's talk about snap. you were the first investor in that company and lately, i mean, we all know what's happened

since the ipo now facebook has gone after them, and we've learned that instagram's stories has outstripped snap's involvement. >> today, 250 million daily active users, up to 200 in april. >> snap has their hands full how do you think they are could go and where are they going, do you think? >> instagram stories and snap stories, while they are similar from a features and functionality standpoint they should get used in very different ways so instagram has always been about, you know, the celebration of kind of the best highlights -- the highlight reel of your life, and so poem who are using it are using it to kind of broadcast the best moments of their lives, and it's very much with the audience in mind, whereas with snap what you're finding is a much more intimate use case where people are sharing with a much smaller set of people the ups and downs and ins and outs of exactly everything going on, not just the highlight reel hand that great intimacy is causing, you

know, really high engagement and really high retention for all the snap chat users. >> still, jeremy, i'm not sure that wall street sees it this way. we're a long way i think from the $27 level that snap shares got to we're right back down to that $17 ipo price. i know you sold some shares as part of the deal what about your remaining stake? have you sold it all, or are you required to be part of the lockup >> yeah, all of the pre-ipo shareholders are bound by the lockup and that still extends for a while longer >> what can you tell us about this round trip that it's been do you think that wall street doesn't understand the snap story? >> we take a very long view of our investments. when we invested in snap chat, the pre-money valuation was $4.25 million. today the market cap stands at, you know, i think it's 15, 18 billion, something like that from that perspective, it's been a fantastic investment for us

and just goes to show how much value has been created by the company. >> okay. let's go on to bitcoin i mean, wow. are we in a bubble with that yet? i mean, digital currencies i see a future for i'm not sure that bitcoin is the one though, but you do, so make the case for it here >> yeah. bitcoin and the other digital currencies, they all really see a lot of benefit in times of political and economic instability. when -- fundamentally when a citizen doesn't have faith in the fiat currency of their country, then they are looking for alternatives and a digital alternative like a bitcoin becomes much more compelling in those circumstances. so if you think about a country like a venezuela or the ukraine, certain parts of the middle east, parts of africa, parts of southern america, parts of eastern europe where there's a lot of instability, and as that global instability increases, people are starting to think

about what could my -- what could my fiat currency do in the future and if there's a risk that it's going to go down and risk because a government might fall or risk because of persistent long-term inflation, then that increases the demand for a digital alternative like bitcoin, and that's really what's been driving the growth over the course of the last three to four years. >> it makes sense, jeremy, but question is how on earth do you put a valuation on that? simply just having a lot of demand, how are you actually coming to a number when it comes to valuation, and isn't it super risky for investors to be buying into something because of instability that isn't backed by government, central banks or real anything? >> i think you could say the same thing for gold, and so, you know, i think the two currencies -- i think gold and bitcoin are trading in very similar ways as a safe haven in countries where there is instability, and so if you form a view about your geopolitical stability and if you believe

that this is going to increase over time, the -- the advantage that bitcoin has over gold is that it's digital and, therefore, it allows for network effects across borders as well. >> but the supply is going to be limited eventually on bitcoin. i mean, we're still mining for gold these days. i mean, come on. you know what we're talking about. it's traded like a tulip bulb at times here, and mott to mention the fact that it's often used for nefarious purpose, buying drugs and dealing drugs around the world. >> ransomware. >> and, again, i ask the question digital currency futures is klee but is bitcoin the vehicle that will be the one that we all talk about in the future, do you think >> bitcoin is a dominant player in digital currencies today. etherium is another digital company that's starting to pick up traction and has been growing

quite quickly but still a fraction of bitcoin's market cap. as you guys know, if you're going to be an investor in anything, you want to be where the most trading volume is happening, and right now that's happening in bitcoin >> fair enough. >> all right. >> it has been the best performing asset, if you want to call it that, this year. jeremy liew, thanks for coming on and defend bitcoin, "planet of the apps. >> the dow is down 33 points any positive close for the dow and the s&p would be a new all-time high but that doesn't look likely l.energy also, heading lower again. worst performing sector and when we come back a look at the decline and what an oil markt could mean for your portfolio as well. >> after three previous rejections, nsci is gearing up to announce whether or not it will include china's mainland shares in its index. that decision is coming this

afternoon. we'll bring it to you as soon as it breaks, and we'll tk alto the company executives about where it resides and it will come up at 4:30 on "closing bell." that's why i have the spark cash card from capital one. with it, i earn unlimited 2% cash back on all of my purchasing. and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... which adds fuel to my bottom line. what's in your wallet? are you ok? what happened? dad kinda walked into my swing. huh? don't you mean dad kind of ruined our hawaii fund? i thud go to the thothpital. there goes the airfair. i don't think health insurance will cover all... of that. buth my fathe! without that cash from - aflac! - we might have to choose between hawaii or your face. hawaii! what? haha...hawaii!

you might have less coverage than you think. visit aflac.com and keep your lifestyle healthy. aflac! >> after three previous at 4:30 on "closing bell." what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter.

morgan stanley the stock market, major a. lower today. not by a whole lot but down fractions for the dow. the s&p, the nasdaq, the russell. you know what's getting hit today. the transports have you seen that >> part of the story there is the oil price which is also

lower. >> they don't move inversely with oil these days. they have been going in lockstep for the most part, and with oil down, look at the transports down, 1.6 today. 152 points, and we have a news alert out of brussels right now. contessa brewer has that story for us contessa >> reporter: yeah, there's been an explosion in central brussels, grand place. anyone who has been to brussels knows it's the main town square. it's been emptied out and police have cordoned off the area near central square they say that a person went in with an explosive belt near the central station, the train station there, that there were shots and explosions heard at the train station and police now say that they have one person under control. that's their words for it. we'll follow this story and get you updates as we get them in. sara, bill. >> keep us posted, thanks. just talking about energy being one of the worst performers dragging down the overall market today as oil officially enters a bear market.

jackie deangelis at the commodity desk with more on what's driving the mother lower and lower. >> reporter: good afternoon, guys an ugly july for crude oil increased downside pressure and both contracts, july and august, dipping under $43 a barrel intraday now, this is a three-part story the way i see it number one, production increases from opec countries like libya and nigeria, although small, are calling no question the commitment to it the opec cut. number two, demand is not rising to meet the excess supply, and it should be this time of year temperatures on the west coast over 100 degrees in some spots, and here still more rain finally, north american production, the u.s. and canada both forecasted to rise significantly. this is where people are starting to get near vows, and they are starting to call for the three handle and i urge you to look at the chart if we hit the three handle two weeks out from the fourth of july, what will happen in the fall >> okay, jackie, thank you very

much. >> now we'll go back to contessa brewer for a cnbc news update. >> thank you here's what's happening right now. the white house is becoming less likely a meeting will take place between president trump and north korea's kim jong-un, this, of course, after american student otto warmbier died days after being released from a north korean prison. trump called the death a disgrace. france is sending fire fighters to help portugal battle a raging wildfire. now, there were reports earlier a water dropping plane crashed we're awaiting confirmation on that this is portugal's deadliest forest fire, killing 64 people this weekend many of them trying to flee. white house press secretary sean spicer may soon step away from the podium for good there's speculation his role may change to one that is less public spicer has been the target, of course, of criticism for his performance during daily news briefings. and toy-maker mattel is giving ken a makeover. the toy-maker revealed its most diverse line of ken dolls ever,

so you can go on and pick different skin colors, hairsales, even body types now he comes in the original, in slim or -- or broad. that's been described as a dad body or some people have said it's barbie's new sugar daddy and new hairsales as well. how have about the man bun ever present on the streets of manhattan. bill, i -- >> when i heard that they were doing the man bun, i misunderstood. i forgot it was the hair thing. >> what did you think? >> man buns. >> i'll take mine fat with a man bun. >> great, sara. less than half a hour to go before the closing bell, and we're looking at session lows for the dow here, down -- we've come back from that. the session was down 44 points we're down 5 right now s&p down half a percent and nasdaq a little more take a look at the russell 2000

and small caps, getting hit a little bit harder here, down a full percent. >> commerce e-commerce giant alibaba looking for u.s. businesses to start tapping into the chinese market our david faber gets the details in an exclusive interview with alibaba vice chair joe tsa i that is next. get this ups is promising a holiday shipping increase for 2017 ahead, we'll take a look at what that will anorme f fedex which reports its earnings after the bell coming up a used car,

26 minutes left in the trading session with the dow down 39 points i've got a guest with me here on the floor of the new york stock exchange want to look at two things oil, big decline and now in bear market territories, and -- and minus energy the rest of the market is taking it in stride here, except the transports. >> we've seen financials and all the rotations except into oil, and oil took out the low that we saw back in may like the rip your face off, that's what they call it, the rip your face off stop order and now we're trending a bit lower and the bear market looks like we may see lower prices which a lot of people weren't forecasting

we may touch 40 before we see 45. >> yeah. and then after the close here we're going to get word from the nsci folks, the index providers, whether they are now going to include to this point restricted "a" shares out of china in their owe merging markets fund what's your bet? >> fourth time is a charm. >> they have reject it had three other times. >> they have made concessions along the way, and now i think they are set up to do it i think the bet is we'll see it. seen too much money to flow into it to be wrong i think the expectations is they will be included so it may not have as much upside as we had hoped because it's already probably built in, but if it doesn't go through that's where you could see the downside and that's what you have to watch. >> we'll have the ceo with us next hour to make that announcement, so we'll find out firsthand. >> must-watch tv. >> as it always is. >> i agree. >> thank you, matt, very much. >> sara. >> all right, bill thank you. less than 25 minutes to go before the bell. let's show you what's happening. the s&p 500 has given back a

little after its 24th record close of 2017. that was yesterday shares down half a percent today the nasdaq is down .75%. some of the losses picking up steam into the close if your fast food became not as fast and better food, would you still want to buy it mcdonald's is finding oitut we'll have the details of that story next

welcome back toe "closing bell." shares of chipotle are getting hit pretty hard today after announcing an increase to its marketing and promotional costs. look at the stock down 7%. the burrito chain still feeling the effects of its food safety crisis in late 2015 and expects marketing costs to increase by as much as 20 to 30 basis points for current quarter. up to 3.7% of total sales. still going through a transformation here of the totalies >> meanwhile, elsewhere, in the fast food business, shares of mcdonald's have hit an all-time high today the stock was upgraded to outperform but there is a story on reuters that some mcdonald's customers are being very frustrated because they are waiting longer for the new fresh

beef patty on their quarter pouncer. takes were one minute longer to cook because it's made to order, not beforehand the original sandwich took less time because they were made ahead of time. so the question is, i mean, the new quarter pounder, the fresh quarter pounder being test-marketed around the country and getting rave reviews for flavor but not for wait time, and especially the drive-thru is the problem. 60% of mcdonald's sales are drive-thrus and when you order the fresh quarter pounder, they ask you to drive and park in the parking lot. >> fresh meat? >> i'll go inside and wait if i have to sit in a car that's a problem. >> the stock continues to be a very strong performer, up 25% this yearand another upgrade. >> all day breakfast has been a winner for them. >> so far, and now there's a

tech story developing and i think that cowan note, some of the plans on mobile payment and setting up kiosks helping to fuel another half a percent gain on mcdonald's stock despite the longer quarter pounders in bill's thrive-thru. >> only a minute but still a wait. alibaba is holding its two-day conference in which they hope to showcase opportunities for u.s.-based small businesses and entrepreneurs to tap into the chinese market alibaba vice chair joe tsa i joins us now in an exclusive interview along with our own david faber. david, it's all yours. >> thank you very much, bill we're joined, as you said, by joe tsa i. nice to see you. thanks for having us here. you'll have 3,000 people who show up here, farmers, small businesses, who at least want to hear about this opportunity to sell into china, but how does that all work?

let's say i'm a small business or i'm a farmer and i'm growing something and i want to sell it there. it seems a strange possibility for me to really access that market how do i do it >> well, first, alibaba can help you access a lot of consumers in china, so we have now 500 million consumers that are shopping on our platform, and -- and so that access is going to be very, very important. >> i get that. how how do i actually deal with you to get the goods and do everything that i need to do >> we deal with the pay points have you to worry about moving your product from here to china. we have warehouse solutions. we have -- we operate warehouses here where can you move your inventory in there and then help move your goods there. we deal with payment solutions one of the biggest pain points of small businesses is getting paid we operate the biggest online payment business ali pay in

china so all the consumers are shopping and paying with a mobile phone so we can help small business with the payment solution and also with currency conversion so all the pain points we have thought through. we also have a bonded warehouse solution. >> so logistically i can make it work i can get enough goods together to make it efficient for me from a shipping standpoint? >> you can, because we have -- our warehouse solution is an aggregate solution so we bring many different parts of the different businesses into one warehouse and then we consolidate and ship them, but you could also bring it in in terms of a bonded warehouse which means that the products come into china without having to pay tariff duties until you sell the goods, and so that's a very easy solution. >> while i'm asking you about these things, joe, but, of course, as the executive vice chairman and one of your key responsibilities is actually m & a, for example, and

acquisitions and broader strategy so let me ask you about that as well you've spent, what, over $4 billion in the last few years on certain deals, haven't you at alibaba >> a few billion dollars >> not necessarily buying big companies, but making smaller investments that scale up over time. >> we have made acquisitions we also have made investments, and it's all revolved around the customer what are we doing to deliver the best consumer experience so in terms of improving the consumer experience, improving the logistics solution and also category expansion, so we do a lot of that through our m & a to help improve the customer experience. >> but the investor meeting you had in china a couple weeks ago, as head of m & a, i have no m & a strategy as it is always follows our business strategy. >> the business strategy to follow the consumers and another thing to expand internationally. we've made a couple of both

acquisitions and investments we made an investment in southeast asia to tap into the 500 million consumers in southeast asia we also have an investment in india. that is the largest payment company in india. >> you've also made an investment i think in brick and mortar retail as well, haven't you. >> we have we have since the last year we have been executing on a strategy of both making online grocery deliveries as well as testing new retail concepts in many urban locations in grocery stores. >> why >> that's because groceries is an important category. it's high frequency. it brings us a lot of user loyalty, and that's why it's important to us. it's a very -- it's a daily necessity. >> so when you saw amazon buying whole foods, did you think that makes sense? >> we're not surprised at all. great minds think alike, and we think that that's a great move

for them to get into the fresh foods category. >> you do. >> which we have been executing on since last year. >> why do you think it's a great move >> well, as i said, groceries is a high frequency use case. it brings a lot of customer loyalty to the platform. it's also in high demand, and in today's consumer market in china, people are looking for high quality foods. >> you were recently quoted as saying e-commerce and traditional retail don't need to necessarily work against each other. >> right. >> there's an idea that it's a winner take all. >> right. >> brick and mortar loses while e-commerce wins. why do you feel otherwise? >> i think the brick and mortar retailers feel threatened that e-commerce is cannibalizing their business, but what we're saying is we're not working against you. we're working with you, and that's because now alibaba has the scale and the consumer reach with 500 million consumers as well as all the user insights

that we have that we can bring to the table, so when we work with a retailer, we can get them access to a lot more customers than they otherwise could get as well as the insights that we bring, so right now, for example, when you shop on the platform, you can basically get personalized recommendations and personalized selections that you and i will see very different things on the platform we use artificial intelligence technology to power that personal selection, and that's something that a brick and mortar retailer cannot otherwise get in terms of the kind of intelligence about their customers, and we're -- we're there to help. >> joe, we've got to leave it there for now, but always appreciate you taking a little time to visit with us. thank you. >> thank you. >> joe tsa i, executive vice chairman of al back ark. back to you, bill. >> thank you, david. thanks to joe tsa i as well. >> and we'll hear more with jack

tomorrow in david's interview. as far as the dow today, the big loser is ge. pfizer and merck loading the dow higher. >> and before we get to the fedex earnings coming up after the bell tonight, we'll talk to a bull and a bear. a debate on whether you should be including the shipping colossus in your portfolio that's coming up next. security . ddos campaigns, ransomware, malware attacks... actually, we just handled all the priority threats. you did that? we did that. really. we analyzed millions of articles and reports. we can identify threats 50% faster. you can do that? we can do that. then do that. can we do that? we can do that. (large boat honking) can we do that? ♪ i'm living that yacht life life life life ♪ top speed fifty knots life

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[ minion babble ] despicable me 3. rated pg. art cashin stepped by a moment ago saying there was an imbalance on the sell side of 500 million. >> we're very proud of that animation. >> there he is, is the studley arthur cashin. don't mess with him. >> sometimes he smiles he's not that scary looking. >> i think we've seen the effects of this -- already the imbalance on the sell side the dow was down about 60 points a moment ago that the low for the session right there. we've just bounced off that. fedex will announce earnings in just a few minutes yesterday ups said that it would raise shipping prices at christmas as online shopping and consequent deliveries continue to soar. more of the retailers are going online so they will charge a

little more for that what do you think? will fedex do the same, and what should we do with fedex as an investment right now >> we've got a bull and a bear on this side of the debate here to debate fedex, principal and managing partner at braten capital and david dietz, investment strategist at pointview wealth management. david, i'll start with you they can implement a surcharge now following ups. the stock has outperformed its rival and the broader markets so far this year. earnings expectations are high what don't you like about it >> yeah. they better put in a surcharge because the valuations at mitt to no fundamental risk you've got a stock trading at close to 29 times earnings and up 31% the last year and up 10% the last month, burr it's not admitting to any risk. the risks are simply tagged. the trump agenda, part of it is all about border taxes and protectionism. that's anathema to a company like fedex

you've also got corporate tax reform that would be fabulous the problem is the analysts have already price that had in. if there's further distraction there, what happens to the stock? you're got the "a" for amazon. seen what amazon has done in retail and supermarkets. they already said they are training their focus on distribution remember, amazon is ten times the size of fedex and they divested amazon air and planning for drones and invested in trailers watch out there and finally the "g" is geopolitics. >> a lot for you to respond to, donald why are you a bull on fedex here >> i guess it depends what metrix we use. amazon being ten times the size of fedex, that's a market cap number, not a ref newly number or infrastructure number i like fedex for several basic reasons. you look at e-commerce and they are the deliverers of

e-commerce you'll see outsized express volume you're seeing semiconductor shipments accelerating in the highest incremental margin they produce is on priority international express. that number is going to be stronger than people expect it to be. the lcl industry is doing very well in the united states. volumes are going to be up there driving freight volume first, so i've got all three major silos stronger than expected volume, one. two, as i look at margins, express is scoring record high margins. when you look at ground, it's poised to report ever stronger margins as it freight, and so i've got better than expected volume, better than expected margins and sol i'd earnings growth it's just that simple. >> all right unfortunately, that's what we have time for as you both made your best case on the bull and the bear side on fedex we'll get those earnings coming up in a few minutes. thank you both for joining us today. >> up next, we're coming right back with llbi's closing countdown. >> her favorite segment.

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(baby crying) ♪ fly ♪ me to the moon (elegant music) ♪ and let me play (bell rings) just inside the 2:00 mark with the dow down 63 points. the story today has to be oil as the price moves into bear market territory. do you know that the peak for oil was back in january? we've been moving lower since that time. here we are now below that peak by more than 20%, so that is the

definition of a bear market. what impact is that having on other investments? sara tells me the canadian dollar, for one is, getting hit today. of course, we know that it's a heavily weighted commodity-based economy, even though the economy is doing okay. canadian dollar was getting hit as a result of this move lower transports though also lower today. there used to be an inverse relationship between the transports and the price of oil, but they have been moving in lockstep lately and that was the case again today the dow itself had that rally yesterday of 144 points putting it in record territory it's pulled back today and so has the s&p out of its own record and bob pisani, we get earnings from adobe and from fedex tonight. >> two things important. first, we're hating 52-week lows right across the oil names exxon, marathon, 52-woke lows and i'm starting to see 52-week lows in retail stocks. amazon rolled out a new product

called wardrobe. check it out a lot of retailers down. they are constructing the whole retail space a big story today. >> something we'll talk about among other things coming up, we'll have the earnings and a lot more in the second half of the "closing bell" with the dow down 62 points on the close. and welcome, everybody, to "closing bell. i'm sara eisen here for kelly evans today. here's how we're finishing up. a down day on wall street. first decline for s&p and dow looking like it's having its worst session and same is true for the s&p 500. nasdaq heavy performing. and the russell 1000 along with transforts also underperformed the broader market oil is a big part of the story as well following a bear market.

we'll discuss it we've also got earnings from fedex and adobe this hour. we'll bring you the results as they come out, and also this hour a big decision. investors have been waiting a long time. we'll get word from nsci whether they will include the chinese stock market in their indices, and the chief executive and head of index management will be joining us as soon as that decision breaks to talk about it that's coming up this hour on the "closing bell. let's talk about this market today. on panel senior markets commentator as always mike santolli and jason ware, chief investment officers at albion financial and michael cogina, asset manager at permanent portfolio funds. overall indexes were modestly lower. i mentioned a few standouts to the downside bob said retail, transports, energy stocks. >> energy. >> also got hit hard and the russell 2000 index of small

caps. >> energy, and consumer in general. this mark qualifiesed a a good little pullback even though it's not dramatic in percentage terms in the broader market. 80% of the volume here at the new york stock exchange was to the downside and we gave back a little more than half of yesterday's gains. the average stock, the equal weight version of the index down today .8%, so essentially it's a little bit of a giveback and even on a day like this you have -- you have some offsets, right? it's never all down. you have two sectors up. just like yesterday. you had a couple sectors down on a big up day i would also say yesterday we were kind of quibbling it was very light volume. today similarly light vinyl so it seems to be consolidation after new highs, at least right now. >> jason, i know, you know, we're quibbling about a 660-point declineoff of all-time high. you are among those that feel it's the fundamental that have gotten us here how much more can they carry us higher here, do you think?

>> we like to judge the equity market at any time in time by looking at what we call. four pillars we want to look at interest rates, valuation, inflation and earnings, and the macro economy which is basically the fountain from which those earnings flow, and, you know, i know wall street never grows tired of a good acronym so let's call it i.v.y. right now all of them are flashing a green light, an earnings-driven rally despite the talk of it being a trump-driven rally we think it's rooted in the earnings accelerated from q3 and q4 and 14% in q1 and low interest rates and sub 2% inflation and valuations, while higher than the historical norm, are not all that stretched i mean, we're looking at around 17, 18 times earnings, depending on whether you want to look forward or backward, and that's not too bad, especially in this environment. >> michael, talk about earnings. as we await our results from adobe and fedex, are earnings expectations getting ahead of this mark, especially with another big decline in energy?

what's that going to do to the overall earnings picture >> well, yeah, but there's other industry sectors that are performing well on an earnings front. no question that energy is down big today and to me that's a big story. starting next quarter you'll have much tougher comps. i think the economic growth story is what mixed. i think there's an anticipation and expectations that we'll have great growth, yet gdp was very weak last quarter. estimates for future gdps the next couple of quarters are coming down and we still don't have the policy tax mix that is supposed to drive the next leg up of animal spirits, dynamic growth it's a little bit of a question of which economy is going to stand up right now and the data points are mixed right now things look good earnings have been strong and i agree. i agree with a lot of jason's comments hon how you fundamentally value the mark the question is where are we going for the second half of the year >> mike santoli, you and i during our production meeting

earlier today we talked about this relationship that's developed between the transports and oil market it's no longer an inversion relationship that we all learned in school, right >> it defies i think a little bit of intuitive logic, right, because they are the fuel burners. no, the transports have more often moved up and down with crude oil. let's say in the last six months than against it. i think it's about -- they are all part of the similar reflation trade. they are all part of is the economy running hot or not so hot even though it's a supply-driven move largely in crude oil. it will did seem to drag it down transports outperformed crude at least for this last little while so maybe this was more of a convergence there. i do think -- >> a catch down as were you saying earlier. >> perhaps, at least the start of it right now. i would say what you're looking for with energy stocks is the possibility that they start to outperform crude oil the lows for today were around 10:30, 11:30 a.m they are very oversold so to me i'm look for the possibility

that the energy stocks are going to be that lagard group that finally gets some relief as opposed to something that continues to drag everything else down. >> down 13.5% as a sector so far this year. jason, house speaker paul ryan did have an important speech today when it comes to tax reform he talked very optimistically about the time line, getting it done by the end of the year. he even said a 15% corporate tax rate, as trump has laid out, is possible what's interesting is that the market didn't really get excited or move on that. a few months ago, that may have been different what does that tell you? >> well, it meals me that the market doesn't believe what house speaker ryan is saying, and, you know, i have to say i share that sentiment there's a lot of moving pieces, and as we've seen so far with this congress and the new administration, they have had such a hard time focusing on putting out fires and as much as paul ryan says they don't get distracted by that the reality is they do these bills come out of committee and need to get the attention of everyone else in

congress and it's hard to do that when there's so many challenging news stories, let's put it that way, every day i don't think the market expects that to happen this year i think it's extremely optimistic to think that it will they are that you can begun maybe staying and not going home for the summer which would be fantastic, you know, to actually work a full year we'd celebrate that, but the reality is i don't think they will get it done and the markets are saying they are not either. >> we've got the earnings from adobe just out josh lipton, i noticed on the ticker the stocks are moving higher how do the numbers look? >> adobe reporting eps of 1.0 it, above expectations of 95%. revenue higher than expected it looks like revenue for digital media, photoshop and revenue 1.21 billion and digital media, annualized recurring he have knew 4.65 billion and

analytics revenue $495 million that stock was already up 40% for the year heading into this print. it looks like it's ticking higher now in the after hours. guys, back for you. >> 2% higher adobe's ceo will be joining "mad money"'s jim cramer tomorrow night, a cnbc exclusive interview to discuss these results and more at 6:00 p.m don't miss it. high expectations already a big winner, mike santoli, 11.5% the last three months. >> the bar keeps going higher because it's been such a good story, and they hurtled it this quarter. stock was above 1.44 in the big-cap tech pullback, and now it may be on this bounce after hours. it might hurtle back above that old high and it did have at least a minor wobble up near the highs here which is the big cap kind of consensus names. >> jason ware, i know you don't

own adobe, but this is becoming a bigger part of the technology story right now with the cloud and everything, right? >> yeah. it seems to be, and as you mentioned we don't here at albion and we do keep an eye on it certainly the transits from boxed software, which was a o one-time revenue recognition mechanism to the lower cost and higher margin cloud-based model has been a transition for them and i believe the digital marketing campaign that they have has been growing very well, and they continue to beat wall street's expectations, have done so for three to four years so the stock has responded in kind. >> yeah. trading, i think, last trading at 54 times earnings michael cuggino, you also thought this was looking a bit expensive. they have beat the expectations as it's popping 3 misin the after hours. >> great companies, great businesses in a growth sector, but it is had a little pricey right now, so i would agree with that i want to go back to one thing

that jason was talking about with the markets' lack of reaction to paul ryan. i think it's interesting to watch the bond market the last book or so since the fed came out. flattening of a yield curve and the two to ten-year spread has tightened and you don't have the long end partition baiting in the same way you would expect if you were expecting growth hand that bears watching to, again, the strength of economic growth and the expectations for policy initiatives going forward. >> reporter: i go that you brought that up and iled asked him what he thought the treasury market would do if in fact they were able to get a tax reform package through congress i mean, theoretically that would be good for growth >> i think the growth trade would reflect the long end

curve. you didn't see the long end -- you saw the ten-year come down. >> right. >> from the trading highs, but i think that is had a lack of growth trade or a non-belief of growth right now or a question as to how strong growth is, and that bears watching. i think if you get the policy initiatives we're talking about. you can see a better sloping curve back again to what we have currently. >> very good got to go guys thank you, michael cuggino and jason ware, thanks for joining us today. >> thank you >> appreciate it. adobe and now fedex earnings are out any minute those earnings when they cross. >> nsci, one of the world's largest index providers is set to decide on whether to include china's mainland stock market into its indexes that announcement coming up in less than 20 minutes we'll bring you the decision and what it could mean for your portfolio coming up. we want to hear from you,

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cisco is launching a new type of network to fend off cyber attacks. david faber sat down with the company's ceo earlier today and joins us now with more on this this new system here, david. >> thanks, bill. that's right it's a lot more than just cyber security they are that you canning about this in very large terms at cisco in terms of it ushering a new era of networking, this, of course, from a company that really introduced networking overall to the u.s. and helped to lead to the burgeoning of the internet itself. but certainly cyber security is one key part of it with billions of new devices being connected over time. perhaps as many as a million an hour by 2020 by some accounts, and most of them phones. we're talking about the internet of things and everything that's going to be a part of that there is a need for a much more intuitive security measure on the network, but it's not just about that

it's about expanding the network. it's about being able to have companies not have their engineers in place to make tweaks and do all sorts of different things that node to take place to change the way a network operates all of this part of what have cisco is introducing today at the present time will only be felt overtime, but we did get that chance, as you said, to speak to ceo robinson, at least get a sense from him how this is going to impact the companies that cisco is doing business with, its customers, and the case he introduced, it's one that, for example, would be a bank that would be using the new cisco network. >> over time the network will actually adapt and learn using machine learning, so that it actually can optimize that experience for the customer of the bank based on the policy and the intent that the bank defines, so we do think it's a seminal moment in networking, and we do think for our company these something that we've been working on for the last two years and we're looking to

helping our customers begin this journey. >> he told me, you know, when you want to make check to see how you'redoing. maybe we'll get a better sense of hue the product is doing in terms of getting engagement from its customer base. they have tested it. as many as 75% of customers including royal caribbean and nata and overall it is going to add to the soft subdescribes ref now scene as it transforms from being hardware only to being bet. >> i was going to ask if there was a lot of demand for this, but they have been test-marketing this with a lot of the companies in the various industries here. this wasn't like the '90s during the dotcom boom in which a lot of answers were provided for

questions. >> certainly on the security front, bill, it would seem that way, given the fact that every new device added to a network can conceivably bring something bad with it. you do need to increase the ability to monitor security so this sort of intent-based security is going to be a part of it. yes, they think there's going to be significant demand from the customers. you'll buy the hardware and then, of course, it's the software overlaying it that you'll be paying the subscription for for really new era networking from the ceo of cisco is not something to be dismissed. >> david, thanks good stuff david faber joining us on the cisco story. >> we have the fedex earnings. morgan brennan is sorting through the numbers. >> it looks like it's a beat on both the top and bottom line $4.25 per share adjusted versus a $3.88 that had been expected by the street.

revenue, $15.7 billion versus the is a.56 billion that had been consensus estimates also important for fiscal year 2018, the outlook there, $13.20 to $14 per share for fiscal 2018 that's excluding the tnt acquisition and the mark-to-market pension accounting that looks like that's better than had been expected also noteworthy in the outlook the company says it's now expecting 2018 to spend $5.9 by theol on capital spending from conversations i've had with analysts, that's higher than anticipated. again, a beat on the top and bottom loin for fedex and take a lock at shares they are up nearly 2% in after-hours guys, back for you. >> morgan, thank you mike, want to get your thoughts. >> i think the slight upside to fiscal 2018 -- we're in fiscal 2018 so that's probably reassuring i think the stock has been in

the process of kind of ref building its valuation multiple from the highs of a couple years ago. had the big oil in the eel merging markets crash and it's now been a big perform ter and not been very expensive so i think you'll have people look at these results and consider them reassuring. >> it's interesting to see, morgan, the divergence in the fedex stock versus ups so far this year. anything about matching the surcharge that we learned from ups into the holiday season? is that going to come on the conference call if they decide to do that >> that's a great question, sara so far going through the results, i've not seen any commentary on that that's something we could potentially get on the conference call starting at 5:00 p.m. eastern fred ship and other chairman will be on the call. interesting about this conference call this time around asked for committed e-mail questions ahead of the call so it's interesting to see what's been posed to them over the last couple of days, but would i suspect and many in the shipping industry suspect that they will

follow suit in terms of trying to realize more profit during their peak season. >> we're very optimistic about fiscal 2018 was the quote from fred smith some look at it as an economic barometer. >> before we go to the break, can we see adobe that is up 3% and it's going even higher now. >> i think pretty soon they will have to add a third "a" to f.a.n.g. >> are they that god >> it's been behaving just like the other ones, just a little bit smaller. >> fedex and adobe, two winning outperforming stocks that delivered and beat expectations. >> yeah. so far it's obviously an off earnings week but definitely encouraging, two mega cap names. >> amazon is buying whole foods. that could be the greatest love story ever told according to whole foods ceo. the details of the company's courtship in his words coming up. >> and there were plenty of them. >> yes, there were. >> voters are turning out today in georgia's sixth congressional district to fill its vacant seat

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a new s.e.c. filing shows the amazon whole foods deal was actually a classic love story. >> love at first sight. >> at a town hall meeting at

whole foods headquarters ceo john mackie told amazon's jeff bezos that they were set up on a blind date and the rest was history. he said it's been a whirlwind courtship because a little after six months after meeting on the blind date we're officially engaged. >> he goes on to say it was love at first sight and he said this is not a tinder relationship, wink, wink i have a feeling i'm off script but i do want to communicate that i am like super excited that would be the quote. >> now we know about the other side of the story. >> none how to parse all of that. >> who was it that warren buffett set up abc and cap cities, right, that's how they came together. >> yeah, back in the '90s. look, i actually think that there's a couple of takeaways for me here. one, this was not a huge master plan by jeff bezos knowing all

along what they wanted to do, and this was the one company they were going to go out and buy and had this in the work forever. it was improvisational because whole foods was in play and had a match-making situation and it seemed to work friday when the news broke, i wonder if bezos is going to acquire some of that buffet buyer of preference kind of idea. >> right. >> you have sub-like mackie, a founder, he wants to put his company in secure and respectable hands. too early to say if that's really what's going on here, but certainly something. >> especially with the apparel announcement, i would say, of the new service. you wonder who might be in play next. >> prime wardrobe. >> yes we're just minutes away from finding out whether the nsci will actually include china's mainland stock market. the head of management research and nsci's research executive will join us with what that means for retail investors. and four former barclays

executives are being charged with crimes in relation to the 2008 financial crisis. more of that coming up on "closing bell. -when? -friday. we gotta go. [ tires screech ] any airline. any hotel. any time. go where you want, when you want with no blackout dates. [ muffled music coming from club. "blue monday" by new order. cheers. ] ♪ how does it feel the travel rewards credit card from bank of america. it's travel, better connected.

welcome back to "closing bell." let's get a cnbc news update now with contessa brewer

contessa. >> sara, here's what's happening right now. we're watching the situation in brussels where security forces shot a suspect in connection with an explosion at a train station in brussels. they cleared out the grand plaza there. authorities say nobody else was hurt, and we're waiting on more to see if there's a connection to terror here and, of course this, city has been on high alert since suicide bombers killed 32 people in march 2016. a freight train carrying propane derailed about 40 miles north of philadelphia. we're not hearing about reports of injuries, but fuel is leaking into a nearby creek. haz-mat crews are on the scene right now. ford has announced plans to invest $900 million at a kentucky truck plant that's where the automaker is producing the redesigned expedition and lincoln navigator. the decision marks a strategy shift for ford responding to growing demand for more expensive and profitable suvs and actor daniel day-lewis says he's retiring from the

business no more acting for him the 60-year-old actor known for playing presidents and gang leaders has not revealed what's behind his decision. his final movie is due out in december if you're an actor you have to announce you're leaving as opposed like a pilot where you just put in for retirement that's the cnbc news update. back to you. >> one of the finest actors of our generation it would be a shame if he doesn't want to keep acting but hey. >> his decision. >> yeah, exactly >> thank you very much, contessa see you tonight on "nightly business report. >> the looking forward to it. >> doing that together on pbs. let's take a look at how we finished the day on wall street. minor pullback for the major averages after the all-time highs that we set yesterday for the dow and the s&p. both of those down factually same thing for the nasdaq. >> actually the worst day for the dow and the s&p in about a month. >> okay. >> major averages closed around the lows of the session. >> and we always look for thosed by bits, the russell down more

that was the biggest decliner there. that had the biggest volatility lately and the oil market down 3% today puts wti crude into bear market territory. now, we should point out that we've got a rollover to the august contract. we're showing july here now at 43 and change, but they are going to the august contract from here on but that pushes it down to a 22% decline from the highs that were set back in january. >> which was a bear market, and now we're at the lowest level for oil since back in november lows of the year, no surprise that energy was the worth performing sector but you noted health care was actually a bright spot. >> health care and utility there was some defense people were looking for something. at least rally attempts. i don't want to make too much of the fact that the market keeps handing things off, but that's the reason that the bears haven't gotten much traction on a brold market basis a lot of give and take and in terms of oil being in a bear market when you talk about commodities, they whip around so much i think it's like the 35th bear market

since the early '80s, so it's not necessarily a different regime here, and, of course, we were already less than half of the highs of a few years ago, so still notable though at the fact that we've broken down through the bottom of that prevailing range. >> also notable what happened in the bond market with the yield moving lower and a lot of attention on the 30-year yield at 2.73. >> oil is related to that because you're bringing your headline inflation expectations down and that's depressing the long end of the curve. >> we're awaiting a big decision from nsci. the previous three times they rejected china's mainland shares in the overall index which i would have to think would attract a lot of investor attention and interests in china's main stock market just being part of this overall index with the popularity of indexes. >> and it would attract dollars, right, just because of the investing through the indexes, and it would represent an evaluation of the chinese market that it had reached some level of maturity.

a lot of it is kind of a mechanical call basically saying does the market behave in a way that we think is reliable enough and basically there's not a lot of trading halts and a lot of this is other technical stuff that they want to see to make sure that it operates, you know, as has mature market. >> but we do live in the world of indexing right now. >> yeah. >> and that will have a big impact on a lot of funds that invest in that emerging markets fund. >> right. >> they will have to involvement in those. >> whether they directly do, or if portfolio managers are benchmarked to those indexes, they are more likely to try to own the mainland stocks. >> the chinese stocks shanghai comp has pretty much gone nowhere and that's one of the questions on the rest of the year whether it continues sort of continues slow and steady growth for china which is still 6%, 6 president 5% growth and what's going on behind the surface and credit market space and credit analysts worrying about that in the second half of the year. >> and it remains an economy

that people are attempting to kind of pull the reins from a central place, and it's not always very comfortable. >> by the way, while we're on this, we were talking earlier, a lot of news out of washington as well today speaker ryan talking a lot about tax reform, and he even told our brian sullivan that he feels like they can get comprehensive tax reform done this year. >> yes. >> two, mitch mcconnell, the majority leader in the senate was saying that he felt like they would be able to get something done on health care reform and, in fact, they are going to unveil what they have been working on behind closed doors on thursday morning. >> it was a lot of ambitious talk about the time frayed, but i think investors have moved into a show-me kind of phase when it comes to these policies not yet relying on some of the more bullish and optimistic talk that we're getting from lawmakers, mike. we were looking at the russell russell index of small caps, domestic companies would benefit from tax reform underperforming today down 5%.

also have some of the other tax reform indicators. >> look at what used to be yahoo. basically a big pile of other stocks and cash and a tax liable, so if corporate taxes were definitely going down, this stock would trade way up i do think the market realizes if there was a great chance of tax reform or if there was almost zero chance of tax reform, paul ryan today would say we've got a pretty good chance of tax reform. >> hard to take information out of the fact he wants to get it out of the calendar and be moving on it we're going to see certainly some move for getting some things in train on this it, and, again, the markets are not going to jump to that conclusion. >> we have now the decision of the nsci on whether to decide including china's stock market in its indices. >> fourth time is a charm for china. the green light has been given to china for their shares to be included in the chinese mainland stocks china currently has the biggest weighting index at around 27%,

but with this inclusion of chinese mainland stocks, that will increase. bottom line. if you are an investor in the eem, popular emerging market index your expoker you're to china is also on the rise. keep in mind, this announcement comes after the nsci rejected china's "a" shares three times but regulators in beijing have been working with the index holder to mitigate some of the risks, especially around transparency and capital controls also over the past year, big asset managers like blackrock and fidelity also saying that china is ready for primetime guys, back to you. >> seema, thank you very much for that highly awaited decision, and guess what joining us now, we've got the group behind t.sebastian leblesh, head of management research and henry fernandez, msci chairman. so henry, what was different this time that got china into the msci index

>> there were a fub things that were different the most important one is that the stock connect program linking the home market with shanghai and shenzhen is very effective and they were able to, you know, consult with our clients and the clients thought that that was a good access into the market that is better than the two other accesses which is the qualifying for institutional investor and the r & b qualifying for institutional investors. that one one thing the second thing is the reduction on the number of suspended stocks since the decline in the control. >> less control. >> a little bit of less control and more of an ability of shares and, three, the loosening. restrictions on the data in order to create index link in investment vehicles, so those were three things we focused on and our clients focused on to be able to get to this point. >> sebastian, how many stocks are we talking about, and what's the time frame

i mean, when does the new version of the index start to trade? >> so, we are talking about 20022 stocks, large-cap stocks which will be added to the emerging market index starting in june of 2018 in two steps first step as of the beginning of june 2018 and the second step, beginning in september 2018. >> so it's not -- we don't start trading this thunderstorm? >> so, you're not start trading these stocks in the flagship indexes, but we will be releasing a number of indexes that will include these 22 "a" shares we call these provisional indexes which is a simulated version of the underlying flagship index already including the change. >> what ultimately will it do to the weighting in some of the broader market indexes in the chinese asia >> these 22 chan "a" shares large caps will represent

slightly 8% in the she merging market index, roughly .73%. >> henry, how much of this decision was about the fact that a lot of your competitors were already moving in this direction, vanguard and blockrock and, you know, some of them that tracked ftse, for instance, which is your competitor and had already included china were you losing out to them on this >> no, nothing to do with that at all msci is its own entity serving a vast majority of customers it was simply a matter of understanding the market, the accessibility of the market and that the conditions were already appropriate for this. >> you have been talking to chinese officials. >> yes. >> we mentioned, you rejected them three others times, but the dialogue continued throughout all of that, and i can imagine that they made -- the changes they made were in response to some of the conversations that you had with them, right >> absolutely. we reflected the comments from the institutional investment community to them. they took them very seriously, and they acted upon some of

them we worked very closely with the vice chairman of the securities commission, vice chairman, and we also worked with the head of the exchange, mr. wang, and also with the hong kong exchange and all of that helped reflect a lot of what we're hearing in the marketplace. >> but how many restrictions are there still on stocks? how much government control is there, price controls, capital controls i mean, investors who worry about that when it comes to investing in china, it's not all clear. >> at this point absolutely only big sort of restriction is the daily trading limit on the amount of money that can go in and out of connection, and obviously this -- the suspension of shares, you know, when that happens, but, you know, we felt and our clients felt that the amount of inclusion should be moderate in order to gain experience and understand, you know, the system and understand the market before further increases take place. >> what do you think this will do to the chinese market

>> i think it will help to some extent stabilize or at least start stabilizing the market, the chinese market the chinese domestic market has been characterized by relatively high volatility because it's a very retail-driven market. by opening up the door to foreign international institution investors, that will bring in long-term stable capital which can only be beneficial to the china domestic market. >> guys, thank you so much for being here. >> thanks for having us. >> sebastian liblich and henry fernandez, head of msci. we'll move on. the fate of the trump agenda may be determined by a special congressional election that's taking operation in georgia. we'll go live to atlanta for the latest on this important race coming up. time's up, insufficient we're on prenatal care.es.

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♪ it's a champagne and models potpourri ♪ on my yacht made of cuban mahogany ♪ gany, gany, gany ♪ watch this to get to. let's get back to cnbc hq and dominic chu. dom. >> what we have right now is a press release come out here from the blackrock board of directors saying that john varley, the former ceo at barclays, has now stepped down from the blackrock board of directors chairman and ceo larry fink of black rock said he's served it with a vote of distinction and blackrock and its management team have benefited greatly from its contributions and i feel

privileged to count him as a friend this, of course, comes as the uk's serious fraud office has charged mr. varley and some other executives at barclay's former executives with conspiracy to commit fraud and with receiving unlawful financial assistance so the latest development here. he steps down. varley was a part of that block rock board upon black rock's completing acquisition of then etf and funds management back over to you. >> here's also a senior independent developer of rio tinto and stepped down from that board position earlier today this is certainly going to hurt his reputation. >> taken nine years. >> finally some executives in this case have been charged with criminal violations. nothing ever happened here in the united states. >> nothing, and, you know, it's also not necessarily the case or set of cases that you would have expected to have finally some criminal attention for large bank executives, right this isn't a really crisis staff

at the core. >> he's not there anymore, but currently barclays is being charged here, and i think that's going to have to be a decision. >> definitely remains an overhang. >> whether they plead guilty. >> some kind of a range play, right. >> we have a few other stories we wanted to comment on here in fast take. genealogy website ancestry.com has filed for a confidential ipo. the number of shares offered, the price range not disclosed, that's the confidential part last may ancestry said it received private equity funding that values the company at about $2.6 billion this is an area i know very well this has been the 800-pound gorilla in the genealogy world. >> he started the bull market for genealogy. >> okay. dna testing is where they are making a big, big inroad right now, so it will be very interesting, but the point of being a confidential ipo. >> yeah. >> i wonder a lot of times just that initial stage and anything

under $1 billion can become a confidential ipo people take advantage of that provision and private equity backers, and a couple of questions that i would have just as a business doesn't seem like the kind of thing that you would have a ton of recurring customer traffic so it's kind of a one-off. >> they traditionally have very high turnover. >> so the churn is probably going to be the question. >> next up, i can be an expert on this, a tipping option for drivers on the app reversing a long-standing policy tipping is available beginning today in three cities, seattle, houston and minneapolis. uber plans to roll it out nationwide by the end of the month. as an uber user, i don't know. i like the fact that it's sort of all built in and i don't have to worry about that. >> no -- no impolicive pressure to tip obviously to me it shows that the customers are -- they are doing this to accommodate the

drivers. they wanted to put them on parity with tax its. >> it was built into the price. >> maybe it's not yet in place, and i think they were pushing for that and since they rate the passengers, right, the drivers rate the passengers, it is that going to create terrible implicit pressure. >> you have a terrible rating for uber >> well, i take a long time to come out, and so i think they die ding me at all sometimes they charge me 5 bucks and then leave. >> they clearly don't know who you are. >> it's election day, not everywhere, but in georgia's sixth congressional district which has had the most expensive house race in history. how much has actually been spent here and what it could mean for the trump agenda. >> coming up on "fast money," with home depot weather the amazon storm former ceo bob nardelli is back. he'll give us his answer tonight coming up at 5:00 p.m. eastern time you got here? this bad boy is a mobile trading desk

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as you well know, georgia's very much on the mind of democrats an republicans today in the congressional race that's now the most expensive in history. for what's at stake to john harwood, who is in atlanta for us today bill, after $50 million invested in this race, all the ad, all the press attention to the race, the weather is emerging this afternoon as a big factor in this race. it started pouring shortly after noon and the question is who does that affect terms of turnout democrats are hoping with this race, a referendum on donald trump that intense opposition from their base including a lot of young people is going to power them out to the polls for

the last few hours >> much more importantly, get a little wet it's an important race i would imagine it's going to affect the vote one way or the other. it would seem that his base is more motivateded >> but this is a very republican district has been b for a long time and donald trump still has a significant number of supporters here including this 82-year-old woman who said she didn't mind get iting a little wet to expres some support for donald trump. >> so, did you get wet coming in here >> not bad but it's worth it. because i know my vote's going to count >> i think the man has not, he's beencrucified. he hasn't had a chance to get his agenda started he's got so much stuff to clear up >> now, here, the question about the voting today substantial

early vote in this race, 140,000 balance as of last friday, it is generally conceded by both campaigns, that the democrat will win that early vote the question is who wins the election day vote couple of hours more before we get that answer, guys >> in rainy atlanta. thank you. >> coming up next, ibm's ceo fresh off yesterday's meeting joins jim cramer >> meanwhile, how would you like to tour our set here at the new york stock exchange and have drinks with me and kelly evans well, now is your chance you can bid on that. all for a very, very good cause. head to our page on charity buzz.com to lerp all the details and to get the bidding going i think it's the rest of the week and early next week as well >> all day >> we'll talk more about this coming up.

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well, our own jim cramer sat down, is sitting down with ibm's ceo. among the topics discussed, her meeting with donald trump and other ceos yesterday at the

white house. >> this is part of a series of meetings we've had and they have been about modernizing the i.t. in our government. there's so many opportunities. modernizing the systems and we work in many of them you know i've been quite focused on how for a country, we have got to work on our skills and prepare not only this current generation, anyone for work because all work's going to include technology >> and you can catch more jim's interview with her tonight, mad money, 6-:00 p.m. eastern time that stock, another underperformer so far this year. it's down about %. >> yeah, it's kind of still having to almost define itself in terms of what it is in terms of the business. people are not really buying into watson being a product or division or anything else, but it is interesting how she has been much more outfront and proactive in terms of specifics in the kinds of things policiwise that she's looking to work with the white house on as

opposed to some of the other tech ceos we saw who were there and not sure why >> my thing yesterday, i was saying, you bring all those tech ceos together talk about how to better automate the federal government and each one is probably going to say buy my product. everybody talks their book >> the biggest xaeps now are just on the public web and facebook, yeah, i think at some point, it's about just outsourcing. i honest tli think if you extrapolate a lot of these strategies in these huge company, disrupting government is the obvious end market out there beyond the stuff >> i will say that tech week seems to be going better for the white house than workforce week and infrastructure week in part because they didn't have comey and sessions testimony in part of those, but i think tech week and the continued focus continues at the white house we'll see if it continues to lead this market >> a lot of those confounding

realities of how antiquated the government is rupp zpl didn't get to stump with santelliy. >> that will be for another day. >> be spontaneous. >> thank you for stopping by >> see you tomorrow. that does it for closing bell. "fast money" begins right now and we'll see you tomorrow here on closing bell. >> "fast money" starts right now. live from the north ameriasdaq e overlooking times square, your traders are pete, tim, steve and guy. tonight on fast, crude oil plunge to a seven month low today and entering a new bear market, but julian emanuel says now could be the perfect time to buy. he'll tell us what has hip so bullish. plus, david faber sitting down can alibaba's ceo, exclusive sw sbur view just moments ago and later, while everybody has been focused on apple and the fang stocks, why only five class bic dow names have been surging. we'll tell you what they are